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Nvidia Admits to Underestimating AMD
Written by Pitch   
Thursday, 14 August 2008 21:54

Nvidia had one ugly second quarter. It lost money. It took a charge for defective chips. And it’s stuck with low-margin inventory it has to burn off. Amazing how a little price competition from AMD’s ATI can magnify poor execution at Nvidia.

Nvidia CEO Jen-Hsun Huang said on the company’s conference call:

"We underestimated the price performance of our competitor’s most recent GPU, which led us to mis-position our fall lineup. The first step of our response was to reset our price to reflect competitive realities. Our action put us again in a strong competitive position but we took hard hits with respect to our overall GPU ASPs and ultimately to our gross margins. The price action was particularly difficult since we are just ramping 55-nanometer and the weak market resulted in taking longer than expected to work through our 65-nanometer inventory."

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